Unilever Q3 Sales Climb 5.8%, Boosted by Currency, Acquisitions

LONDON — Currency tailwinds and acquisitions at Unilever helped to fuel a 5.8 uptick in third quarter turnover to 13.3 billion euros.
The parent of consumer brands ranging from Dermalogica and Hourglass to Lipton and Cif said in a trading update on Thursday that underlying sales growth in the three months to Sept. 30 was 2.9 percent, due to increases in volume and price, while emerging markets and home care were the quarter’s top performers.
Growth in Europe was disappointing, while sales of hair care in the U.S. remained challenging, and underlying growth in beauty and personal care was slower than the overall figure for the parent company.
Alan Jope, chief executive officer, said that going forward, Unilever plans to step-up competitive top line performance “through innovation and portfolio evolution” to serve the faster growing geographies and channels.
“We are committed to delivering superior long-term financial performance and balanced, compound growth of the top and bottom line through our sustainable business model. We are taking action to remain relevant to the consumer of the future, such as setting stretching goals on plastic use,” he said.
He added that for the full year, underlying sales growth will be in the lower half of Unilever’s multi-year 3-5 percent range, while there will be an improvement in underlying operating margin, which will “keep us on track for the 2020 target and another year of strong free cash flow.”
At 2.8 percent, underlying sales growth in beauty and personal care, Unilever’s largest product division, was marginally slower than the overall company figure. Sales in the division reached 5.6 billion euros in the three-month period.
The company said deodorants performed well, with continued success from the rollout of the Rexona Clinical range, while in skincare, innovations including Pond’s Glow Up cream, a hybrid product across skin care and makeup, saw good performance.
The company said that “competitive intensity” remained high in hair care, in particular in the U.S. and China, where it continues to focus on innovating and increasing market activity. To wit, it has been developing on-trend new formats such as Love Beauty and Planet’s shampoo and conditioner bars, which cater to consumer demand for reduced packaging.
Prestige brands, such as Dermalogica, Hourglass and Living Proof, continued to perform well.
Underlying sales growth in North America was positive, helped by price growth. In beauty and personal care, skin care grew well, although performance was held back by a decline in hair care, Unilever said. Seventh Generation eco-friendly products and the e-commerce channel continue to perform strongly.
Europe declined 0.3 percent in a retail environment that remains difficult, Unilever said. Eastern Europe grew well across all divisions and the company said it saw good growth in Italy, helped by purpose-led activations, while the decline in Germany slowed.
Ice cream volumes were down against tough comparisons due to very good weather in the corresponding period in 2018.
The company said that good growth in South East Asia was volume driven, with Indonesia, Vietnam and the Philippines performing strongly across all divisions. Despite a market slowdown in India, growth in South Asia was strong and ahead of markets. Turkey and the Middle East grew in the double digits, while Africa saw a difficult quarter in volatile economic conditions.
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